S&L figure Tom Billman sentenced to 40 years

June 21, 1994|By Melody Simmons and Marcia Myers | Melody Simmons and Marcia Myers,Sun Staff Writers

Saying society is fed up with savings and loan directors who have stolen from their depositors, U.S. District Court Judge J. Frederick Motz sentenced convicted financier Tom J. Billman today to 40 years in prison and ordered him to pay $25 million restitution.

Billman, who according to court documents was expecting a sentence of only two years for defrauding about 20,000 depositors of $28 million, sat with slumped shoulders as Judge Motz issued the sentence.

"I don't think you can be rehabilitated," Judge Motz told Billman, referring to recent revelations that the former chairman of Community Savings & Loan of Bethesda was manipulating millions of dollars from his cell in the City Jail.

"Society finally has to say this is something which they will not put up with," the judge continued. "Regulators let us down, Congress let us down. Somebody has to say there are values."

Judge Motz said the 54-year-old Billman's defrauding of depositors, his transfer of $22 million to banks in Switzerland and his fleeing of the country were among the reasons for the 40-year sentence.

He also cited Billman's "post-trial" obstruction of justice, referring to his attempts to transfer money into different accounts from his jail cell.

Billman was convicted in April in U.S. District Court in Baltimore of stealing millions from Community Savings and Loan, the defunct Bethesda savings and loan institution that he chaired.

The financier also has been accused of directing from a jail cell in Paris the transfer of $40,000 to set up a cash account in Bethesda using a Brazilian courier and $40,000 of embezzled money.

Billman's attorney, John R. Fornaciari, called the sentence "outrageous."

"It has no relationship to reality," Mr. Fornaciari said.

In recent correspondence with the courier, Billman wrote that he believed he would receive only a two-year sentence, prosecutors said..

Today's 40-year sentence includes an order to pay restitution of $25 million plus interest that will be figured on different interest rates going back to 1986, the judge said.

The Billman saga began in late 1988, when he used a phone passport to flee the U.S. after wiring $22 million to Swiss bank accounts. He then lived lavishly abroad and then eluded investigators for four years before being arrested in May 1993 in Paris.

In May, federal prosecutors revealed that Billman had stashed $6 jTC million in cash and gems in England and Austria after a courier, Ricardo Diniz Monteiro, working for the convicted financier was arrested in Vienna while trying to make a bank transaction.

Billman's attorneys have denied that he was hiding the cash and gemstones. They said last week that he planned to repay $4 million to the Internal Revenue Service and then other debts that included $850,000 to his wife and $250,000 to his attorneys.

Yet under further questioning by federal agents, Mr. Monteiro, the Brazilian courier, described traveling to the U.S. to open an account at Riggs Bank in Bethesda under his name but with funds from Billman.

Court records showed that $40,000 was wired into that account while Billman was in prison in Paris in April 1993 awaiting extradition. Mr. Monteiro told prosecutors, instructions for the financial transaction came through Mr. Monteiro's mother, who was an attorney hired by Billman. In those instructions, Billman emphasized that the account "is intended to be my cash in the U.S.A.," prosecutors said.

One of Billman's attorneys, Andrew Radding, denied last week that the money wired into the Riggs account was Billman's.

The other attorney, Mr. Fornaciari, disclosed the $6 million as a footnote to a sealed financial statement that was filed with the court after the courier's arrest in Vienna. The statement was filed before prosecutors publicly revealed their discovery of the money.

Prosecutors also said they had obtained a handwritten note from Billman to the courier detailing instructions for financial transactions. The letter was filled with code words and secret messages and advised the courier to destroy all records of the instructions after the transactions were completed. In another instance, Neil Dilloff, a representative of the Maryland Deposit Insurance Fund said last week that Billman has significant assets stashed in many locations that have been discovered by Maryland Deposit Insurance Fund. Mr. Dilloff has declined to identify the assets.

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